Ask the Life Insurance Expert

My mother-in-law wants to add me and my husband on her life insurance as beneficiaries. Is this a good idea?

It is indeed a good idea. It’s nice that your mother-in-law wants to provide for you in this way. In case you’re unfamiliar with the term, the beneficiary is the recipient of the proceeds of a life insurance policy with the named insured dies.

If your mother-in-law is placing you and your husband on her policy, I’m assuming that means she is the owner of a policy on herself and so, as her beneficiaries, the life insurance money will come to you and your husband if she passes away.

Your mother-in-law can designate the beneficiary in different ways depending on her intention. She could designate your husband as the primary beneficiary and you as the secondary beneficiary. With it set up this way, you would get the benefit only if your husband is deceased when your mother-in-law passes away.

Or your mother-in-law could designate percentages for the distribution, like 50/50 or 75/25 for each of you.